works weddings and prom-type parties. The balance of AbbottAbbott , Capital was
ID: 2611690 • Letter: W
Question
works weddings and prom-type parties. The balance of AbbottAbbott , Capital was $ 14 comma 000$14,000 at DecemberDecember 3131 , 20132013. At DecemberDecember 3131 , 20142014 , the business's accounting records show these balances: Prepare the following financial statements for Picture GalleryPicture Gallery for the year ended DecemberDecember 3131 , 20142014 : a. Income statement b. Statement of owner's equity c. Balance sheet
Insurance Expense
$4,000
Accounts Receivable
$13,000
Cash
43,000
Notes Payable
16,000
Accounts Payable
12,000
Abbott, Capital, Dec. 31, 2014
?
Advertising Expense
4,500
Salaries Expense
26,000
Service Revenue
100,000
Equipment
62,500
Abbott, Withdrawals
17,000
Owner contribution, 2014
28,000
Explanation / Answer
Answer a. Picture Gallery Income Statement For the Period Ended Dec 31, 2014 Revenue: Service Revenue 100,000 Expenses: Insurance Expenses 4,000 Advertising Expenses 4,500 Salaries Expenses 26,000 34,500 Net Income 65,500 Answer b. Picture Gallery Statement of Owners' Equity For the Year Ended Dec 31, 2014 Abbott Capital - Dec 31, 2013 14,000 Owner Contribution, 2014 28,000 Net Income 65,500 Sub-total 107,500 Abbott Withdrawls (17,000) Abbott Capital - Dec 31, 2014 90,500 Answer c. Picture Gallery Balance Sheet For the Year Ended Dec 31, 2014 Assets Current Assets Cash 43,000 Accounts Receivable 13,000 56,000 Property, Plant & Equipment Equipment 62,500 Total Assets 118,500 Liabilities & Owners' Equity Liabilities Current Liabilities Accounts Payable 12,000 Long Term Liabilities Notes Payable 16,000 Total Liabilities 28,000 Owner's Equity 90,500 Total Liabilities & Owners' Equity 118,500
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